The former Australian captain has played 167 Tests for Australia and has scored 13,366 Test runs.
Pressure had mounted on Ponting after he scored a combined total of just 20 runs in his past three innings for Australia against South Africa.
He first told his wife of the decision before informing his team-mates today.
Ponting, 37, will equal the record of 168 Test matches set by Steve Waugh with his final appearance.
